We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Clean Air Metals Inc. (CVE:AIR).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At Clean Air Metals
The Executive Chairman of Board James Gallagher made the biggest insider purchase in the last 12 months. That single transaction was for CA$116k worth of shares at a price of CA$0.29 each. That implies that an insider found the current price of CA$0.30 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Clean Air Metals share holders is that insiders were buying at near the current price.
While Clean Air Metals insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Clean Air Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Clean Air Metals Have Bought Stock Recently
Over the last quarter, Clean Air Metals insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$427k worth of shares. This makes one think the business has some good points.
Insider Ownership of Clean Air Metals
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Based on our data, Clean Air Metals insiders have about 2.9% of the stock, worth approximately CA$1.2m. We consider this fairly low insider ownership.
So What Does This Data Suggest About Clean Air Metals Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Clean Air Metals insiders are expecting a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 5 warning signs for Clean Air Metals (3 are a bit concerning) you should be aware of.
Of course Clean Air Metals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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